Exam (elaborations)
ROCKWELL SAMPLE EXAM 3 QUESTIONS AND ANSWERS
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ROCKWELL SAMPLE EXAM 3 QUESTIONS AND ANSWERS
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Name: Score:140 Multiple choice questions
Term 1 of 140
It is legal for a property manager to:
Collect a larger security deposit from tenants with a service animal
Obtain employment information to determine if a tenant can afford the rent
Refuse to rent to families with children
Refuse to allow a disabled tenant to install grab bars in the bathroom
Term 2 of 140
A builder plans to construct a single family home on spec, which he will then sell himself. He
needs to borrow $60,000 to do so, and he approaches the local bank for a construction loan.
Is this loan subject to Truth in Lending Act disclosure rules?
No, because no disclosure is required for business loans
No, because TILA doesn't apply to loans that large
Yes, because the loan concerns a single-family residence
Yes, because TILA applies to all loans
Term 3 of 140
The maximum amount that a bank will lend to a borrower is twice the borrower's annual
income. If a borrower's annual income is $76,200, and she wants to buy a house for $247,000,
how large a downpayment will she need to come up with?
$47,300
$94,600
$170,800
She will be ineligible to purchase this house
,Term 4 of 140
What kind of property could a buyer purchase with an FHA 203(b) loan?
Apartment building
Commercial property
Farm occupied by a tenant
Four-unit dwelling where the buyer will occupy one of the units
Term 5 of 140
A real estate broker represents the seller in a transaction involving an investment property.
Several months later, the new owner asks the broker if he would act as property manager for
that property. The broker may take this position:
Only if his designated broker allows it
Only if the broker and the buyer are not related
Only if the broker does not work for compensation
Only if the broker works for a third party rather than the buyer
Term 6 of 140
A developer wants a construction loan to build 20 homes. The lender requires a take-out
commitment. This means the developer needs:
A clause that allows individual lots to be released from the blanket lien when they are
sold to purchasers
A new mortgage that wraps around an existing first mortgage
A permanent lender who will provide financing once construction is completed
An interim contract guaranteeing that the property will be finished by certain date
,Term 7 of 140
Which of the following is an example of commingling?
Placing a buyer's deposit in a trust account
Depositing rent from a commercial rental account in a trust account
Depositing an employee's paycheck in a trust account
Paying the firm's commission directly from a trust account
Term 8 of 140
Prices in a local market are trending downward. A seller found that she had to lower the price
of her house by $25,000 over the course of six months before she could find a buyer. Upset
over selling at a loss, she informs her listing agent that she is going to lower the commission
rate that she pays. Can she do this?
Yes, a loss by the seller must be shared by the listing agent
Yes, since commission rates are negotiated and can be changed at any time
No, commission rates are established by the local multiple listing service and cannot be
changed
No, the commission rate, once established in the listing agreement contract, cannot be
changed unless both parties agree
Term 9 of 140
A buyer's earnest money deposit can be kept by a seller in the event of a buyer's default only if
the:
Seller breaches the contract
Seller can prove that she has suffered a financial loss
Purchase and sale agreement includes a forfeiture clause for liquidated damages
Purchase and sale agreement provides for specific performance
, Term 10 of 140
A real estate agent completed a listing agreement form, which the sellers signed. At what point
should the agent give the sellers a copy of the form?
Immediately after they sign the listing form
Only after a buyer has made an offer
Once the listing has been entered into the local MLS database
When the sellers finish filling out the seller disclosure statement
Term 11 of 140
Once a contract for deed is signed by the parties, the buyer immediately receives:
A life estate
Legal title
Equitable title
The right to lease the property
Term 12 of 140
The seller tells the buyer's agent that the home has never had flooding issues, but when
touring the home, the buyer's agent notices a sump pump in the basement. The buyer's agent
should:
Say nothing because the seller said there was no flooding
Advise the buyer that the sump pump may be sign of flooding and that she should
inquire into whether flooding is an issue
Contact the seller directly to ask about the sump/pump flooding
Instruct the buyer to stop considering the property
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